Sanbrado Mining Company (Société des Mines de Sanbrado – SOMISA) and Orezone Bomboré have announced their intention to sign a memorandum of understanding to create synergy between the 02 mining projects. This protocol could create significant value for the 02 parties.
The mining sites of SOMISA, operated by West African Resources, and Orezone Bomboré are 14 km apart. The 02 sites are located in the Ganzourgou province on the Ouaga-Fada N’Gourma road. The two projects currently host gold resources of around 11 million ounces. West African Resources is reportedly in the process of building a second mine at Kiaka, worth 7.7 million ounces. Kiaka is located 45 km south of Sanbrado. The mine, which is currently under construction, is expected to start producing gold in 2025. The Orezone Bomboré, SOMISA and Kiaka sites and the exploration licences held by these companies cover an area of more than 1,800 km2 in a highly prospective zone.
The memorandum of understanding signed between the two gold mining companies is expected to deliver significant savings over the life of the mines in their respective operations, by focusing on certain aspects. This is the case for the electricity network. Orezone is currently finalising the connection of the Bomboré mine to the national electricity grid (SONABEL). The Kiaka processing plant will also be supplied by this network. The two companies have agreed to investigate the possibility of extending the Bomboré power grid spur line to Sanbrado, which would significantly reduce processing costs at Sanbrado.
In terms of back-up thermal power, the connection of the 02 mines would give Bomboré access to the 24 MW Sanbrado power plant for emergency power when needed to maintain operations. The two companies will explore the possibility of installing a centralised solar power plant to further reduce electricity costs in their operations and benefit from the economies of scale of a larger jointly funded project. On the procurement and supply chain side, companies will be looking to use their combined buying power to reduce the costs of consumables, storage and transport. In terms of common spare parts, the two companies will examine which critical spare parts can be shared between operations to optimise stock levels. On a community level, the companies will work together in the areas of corporate social responsibility, training, employment and livelihood restoration programmes to ensure maximum benefits for local communities. Youth employment programmes and training centres will be set up, with an emphasis on vocational training as well as healthcare, agricultural management and restoration of the local environment. In the area of security, the 2 companies will explore opportunities for cooperation and optimisation of security costs.
Richard Hyde, Executive Chairman and Chief Executive Officer of West African Resources, commented: “The ongoing discussions between West African Resources and Orezone reflect a sensible approach to reducing costs and maximising value for money. We believe that this co-operative approach will enable both companies to improve returns to shareholders, as well as securing the long-term future of gold mining in this region of Burkina Faso”.
Patrick Downey, Chairman and CEO of Orezone, said: “This MoU represents an effective way to generate long-term value from each of our assets in Burkina Faso, with the active participation of our neighbouring communities. As the industry as a whole continues to face cost inflation, this MoU represents a significant opportunity to improve our cost structure and create value for our shareholders. As Orezone and WAF look to take these initiatives forward, we will continue to uphold the highest standards of safety, as well as responsible and meaningful engagement with our employees, communities and other stakeholders”.
Elie KABORE
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